Energy crunch-hit Europe “is sucking gas away” from other countries, especially the world’s developing ones, “whatever the cost,” Saul Kavonic, an energy analyst at Credit Suisse Group AG, has told a US news outlet.
He claimed that energy security concerns in Europe “are driving energy poverty in the emerging world.”
The remarks come as Europe is trying to tackle dwindling fuel supplies from Russia, caused by Western countries' tight sanctions against Moscow that were imposed shortly after the start of the ongoing Russian special military operation in Ukraine in late February. Adding insult to injury was also the EU's reluctance to pay in rubles for Russian gas.
The US media outlet noted in this regard that European countries, hit by gas shortages, had moved to turn to “the spot market, where energy that isn’t committed to buyers is made available for short-notice delivery.”
According to the outlet, soaring energy prices have prompted some suppliers to South Asia to simply cancel “long-scheduled deliveries in favor of better yields elsewhere.”
Raghav Mathur, an analyst at Wood Mackenzie Ltd, was quoted as saying that “suppliers don’t need to focus on securing their LNG [liquefied natural gas] to low affordability markets.”
He spoke amid reports of EU countries, including Germany, Italy, Finland, and the Netherlands, being in a hurry to complete the construction of floating import terminals to bring in more fuel in the future. The US news agency revealed in a survey that European demand for natural gas is expected to increase by almost 60% through 2026.
This was preceded by Alexey Miller, the head of Russian energy giant Gazprom, warning last month that the introduction of a price cap on Russian gas in Europe, if such a decision is made, would be a violation of the contractual terms and will entail the termination of supplies.
On October 7, the EU imposed its eighth package of sanctions against Moscow, which in particular sets a framework for capping the price of Russian seaborne oil exports at a level coordinated by the G7. The measure is due to go into effect on December 5 for crude oil and on February 5 for refined petroleum products.
In late September, the energy ministers of 15 EU countries sent a joint appeal to the European Commission to call for the introduction of a price cap for all gas imports into the EU, regardless of their origin, to curb rising energy prices.
In a separate development, explosions occurred on September 26 at three of the four strings of the Nord Stream 1 and 2 underwater pipelines, which were built to carry a combined annual 110 billion cubic meters of Russian gas to Europe. The sabotage of the Russian pipelines halted gas deliveries to Germany ahead of the cold season, prompting a gas price hike and a scramble for alternative sources in the European Union.
Since 2021, energy prices in EU countries have been surging as part of a global trend. After the beginning of Russia's special operation in Ukraine on February 24 and the West’s adoption of anti-Russian sanctions, energy prices have accelerated this growth, placing energy security high on both the global and national agendas, and pushing many European governments to resort to contingency measures.